Hanson v. Roesch

• Decision Date: 22 November 1918
• Docket Number: 14944.
• Citation: 104 Wash. 257,176 P. 349
• Parties: HANSON, State Bank Examiner, v. ROESCH et al.
• Court: Washington Supreme Court

176 P. 349

104 Wash. 257

HANSON, State Bank Examiner, v. ROESCH et al.

No. 14944.

Supreme Court of Washington

November 22, 1918

Department 2.

Appeal from Superior Court, King County; King Dykeman, Judge.

Action by W. E. Hanson, the State Bank Examiner of the State of Washington, successor in interest of the German-American Mercantile Bank, against Charles Drake, T. O. Paxton, and Louise Guidicelli, who, with W. J. Bruggemann, since bankrupt, were copartners doing business under the firm name of Mercantile Funding Company, and against Louis Roesch and Edward Roesch, doing business under the name of the Roesch Motor Car Company. From judgment for plaintiff, defendants Roesch appeal. Reversed, and cause remanded for new trial.

Edwin H. Flick, of Seattle, for appellants.

C. H Winders, of Seattle, Charles Drake, Vanderveer & Cummins Frank E. Green, M. M. Richardson, and Hugh C. Todd, all of Seattle, for respondent.

HOLCOMB J.

The state bank examiner, successor in interest of the German-American Mercantile Bank (defunct), in liquidating its affairs as required by law, prosecutes this action on three promissory notes aggregating $4,500 principal with interest at 8 per cent. per annum, payable to the order of Mercantile Funding Company, a partnership. One note for $2,000 dated October 19, 1914, and payable on or before April 19, 1915 was signed, 'Louis Roesch' and 'Edward Roesch.' It was indorsed: 'Interest paid to April 19, 1916. Mercantile Funding Co., by W. J. Bruggemann.' The second note for $1,000 dated November 9, 1914, and payable on or before May 9, 1915, was signed, 'Edward Roesch, Roesch Motor Car Co., and Louis Roesch.' It was indorsed: 'Interest paid to May 9, 1916. Mercantile Funding Co., by W. J. Bruggemann.' The third note for $1,500 dated November 28, 1914, and payable on or before April 19, 1915, was signed, 'Roesch Motor Car Co., Edward Roesch.' It was indorsed: 'Interest paid to May 19, 1916. Mercantile Funding Co., by W. J. Bruggemann.'

The defendants Roesch admit the execution of the notes and claim an offset, if valid, together with usury, would satisfy the obligation of these notes. They allege, in substance: That on November 9, 1914, they agreed to and did turn in to Charles Drake and W. J. Bruggemann, who they allege were sole partners, so stated by them, comprising Mercantile Funding Company, a certain lot at a fixed price of $800, plus one-half of the profits to be derived by the erection and sale of a bungalow on the lot, which netted the Mercantile Funding Company $1,400. That on March 27, 1915, defendants Roesch turned in an automobile at an agreed price of $1,150, which amount defendant Roesch paid in behalf of Drake and Bruggemann as the Mercantile Funding Company to the Velie Motor Car Company, and that both Drake and Bruggemann stated that they needed this car in the business and would use it in the business of the Mercantile Funding Company, that of building houses and loaning money. That about September 4, 1915, defendants Roesch exchanged this car for a new one, charging $775 additional, that both the automobile charges were agreed to be credited upon the Mercantile Funding Company notes, and that it was again stated that these parties mentioned would use, and needed the use of, the car in the business of the Mercantile Funding Company. That on January 26, 1916, Drake and Bruggemann agreed to and did take over certain notes from one Anderson, in the amount of $526 rightfully belonging to Roesch Motor Car Company as a balance due on the Anderson car, and agreed to credit same on the Mercantile Funding Company's notes herein referred to. That the foregoing credits were agreed upon immediately at the closing of the above transactions, and were at various times thereafter referred to by Drake and Bruggemann as having been given upon the notes. That defendants Roesch had no knowledge that defendant Guidicelli was a partner in the Mercantile Funding Company, and were led to believe, and did believe, that Bruggemann and Drake were the sole partners therein, until after September 1, 1916, when for the first time defendants Roesch knew that the notes had been pledged by the Mercantile Funding Company to the German-American Mercantile Bank, and that at that time the notes were unindorsed, overdue a year and a half, and showed no credits in favor of defendants Roesch. That defendants Roesch, under protest and without waiver of any and all their rights existent therein as appears more fully in a certain contract, paid on the notes the sum of $500 on or about December 12, 1916, to the German-American Mercantile Bank. That at all times herein mentioned, and up to approximately October 1, 1916, W. J. Bruggemann was and continued to act as a director or trustee of the German-American Mercantile Bank, and was during all of the times manager of the Mercantile Funding Company, actively engaged in all of its operations, and fully conversant with all of the matters herein recited, and the German-American Mercantile Bank had full knowledge of all of the transactions at the time of taking over the notes. That the defendants Roesch paid as bonus 1 per cent. per month for six months on the loan made represented by each of the notes, which interest or bonus is usurious, and they claim a credit for such usury. The defendants Roesch pray for a dismissal against plaintiff and the other defendants, and for a judgment against the German-American Mercantile Company for the return of $500 under that agreement made December 12, 1916. T. O. Paxton was dismissed from the action early in the trial.

The cause was tried by the court sitting with a jury, which returned a verdict for the defendants. The court granted a motion notwithstanding the verdict, and entered a judgment against defendants and each of them for the sum of $3,099.43, and against defendants Guidicelli and Drake and each of them for $2,428.92 additional. The defendants Roesch presented findings of fact to the court, but the court refused to make any findings. The defendants Roesch excepted to the court's refusal to make findings, and excepted to the judgment entered against them. The defendants Roesch appeal.

Appellants assign as errors: (1) Granting motion non obstante veredicto (2) refusal...